TCR_Public/980922.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
      
   Tuesday, September 22, 1998, Vol. 2, No. 185

                  Headlines

AHERF: Seeks Approval for Bonuses
AMERICAN RICE: Indenture Trustee Seeks To Lift Stay
AMERICAN RICE: Interim Okay For $8 Million Of DIP
BARRY'S JEWELERS: Announces Confirmation of Plan
COUNTY SEAT: Files Quarterly Report with SEC

FIRST UNION: Offers 31,431,000 Shares of Common Stock
GANTOS INC: Files Quarterly Report with SEC
HAACK'S CYCLE AND FITNESS: Closes Stores - Files Chapter 7
HARVEY ELECTRONICS: Quarterly Report Filed With SEC
INTERLINE RESOURCES: Creditor To Support Plan

KOO KOO ROO: Shareholders To Vote on Merger
LTCB: Government May Bail Out Bank With Public Funds
LAMONTS APPAREL: Files Quarterly Report With SEC
LOT$OFF CORPORATION: Files Quarterly Report With SEC
LOUISIANA-PACIFIC: Announces Restructuring Plan

MOBILEMEDIA COMMUNICATIONS: Plan of Merger
MOTOROLA: Plant On Hold
PHILIP SERVICES: Stock At 52-Week Low
PHILIPPINE AIRLINES: Will the Government Save It?
SWALLEN'S INC: Family Agrees to Deal

VOXEL: A Product Worth Saving
WESTBRIDGE CAPITAL: Files Prepackaged Plan
WET SEAL: Files Quarterly Report

Meetings, Conferences and Seminars    

                  *********

AHERF: Seeks Approval for Bonuses
---------------------------------
Allegheny Health Education and Research Foundation has
requested approval from U.S. Bankruptcy Judge Bruce
McCullough to distribute $12 million in bonuses to 534
employees mainly in the Philadelphia area, in an effort to
keep them from leaving, according to the Associated Press.
"If the employees all get up and leave at this time of
distress, you have nothing," said attorney Neal Colton, who
is representing HealthAmerica, one of AHERF's largest
creditors. The proposal is aimed at management employees,
who earn an average of $95,000. Their monthly bonuses would
be about $118.

AHERF's eight Philadelphia-area hospitals and Allegheny
University of the Health Sciences filed chapter 11 in July.
The system's four Pittsburgh-area hospitals are not
included in the filing. (ABI 21-Sept-98)


AMERICAN RICE: Indenture Trustee Seeks To Lift Stay
---------------------------------------------------
The indenture trustee for American Rice Inc.'s 13 percent
mortgage notes is seeking automatic stay relief to pursue
its rights under the notes or, alternatively, adequate
protection payments for the continued use of its
collateral. U.S. Trust Co. of Texas N.A. asserted that it
would "suffer irreparable injury, loss and damage" if it is
not allowed to foreclose its liens and security interests
and is not given adequate protection. On June 19, U.S.
Trust gave notice that it was accelerating demand for
payment of all obligations under the notes as a result of
the company's default in making interest payments due under
the notes. Principal and interest due under the notes as of
Aug. 11 totaled about $113.6 million. "Substantial amounts"
are also owing for costs, attorneys' fees, and expenses
incurred in connection with the collection and enforcement
of the notes and the collateral. The U.S. Bankruptcy Court
in Corpus Christi, Texas, has set a Sept. 28 hearing on the
indenture trustee's request. (Daily Bankruptcy Review and
ABI Copyright c September 21, 1998)


AMERICAN RICE: Interim Okay For $8 Million Of DIP
-------------------------------------------------
American Rice Inc. has interim approval for up to $8
million of additional debtor-in-possession financing over
the next four months from its bank group, led by First
Union National Bank.  There were no objections and the U.S.
Bankruptcy Court in Corpus Christi, Texas, gave the
new financing interim approval at a Sept. 11 hearing.
(Federal Filings Inc. 21-Sept-98)


BARRY'S JEWELERS: Announces Confirmation of Plan
------------------------------------------------
Barry's Jewelers Inc.  (OTC BB:BARYQ) announced that its
Plan of Reorganization dated April 30, 1998, as modified
was confirmed on  Sept. 16, 1998, by the U.S. Bankruptcy
Court, Central District of California.

Barry's presently anticipates emerging from Chapter 11
proceedings through effectiveness of the Plan on or about
Sept. 29, 1998. At that time, the Company will become
Samuels Jewelers Inc., assuming the name of its strongest,
most well respected division.

The Plan provides for the payment in full of certain
administrative claims, tax claims, bank secured claims and
other allowed secured claims, the distribution of 4.75
million shares of new common stock to bondholders in
exchange for their allowed claims and $15 million in a new
cash equity infusion, the payment of 15% of the allowed
claims of general unsecured creditors (or a ratable share
of  $2.55 million if the aggregate amount thereof exceeds
$17 million), and the issuance of 263, 158 warrants to
purchase new common stock to stockholders in exchange for
their shares of old common stock.


COUNTY SEAT: Files Quarterly Report with SEC
--------------------------------------------
County Seat Stores Inc. filed a report of its financial
results with the SEC for the quarterly period ended August
1, 1998.

Net sales decreased $16.7 million, or 19.2% to $70.2
million for the 13 weeks ended August 1, 1998 from $86.9
million for the 13 weeks ended August 2, 1997.  The decline
in sales was primarily due to (i) the closing of 137 stores
during 1997, which accounted for $10.1 million of the
decrease in net sales and  (ii) a $7.6 million, or 9.9%
decrease in comparable store sales. The decline in net
sales was partially offset by $1.0 million relating to new
store sales.

Loss from operations increased to $(10.9) million for the
13 weeks ended August 1, 1998 from $(5.6) million for the
13 weeks ended August 2, 1997.  

Net sales decreased $46.6 million, or 25.9% to $133.4
million for the 26 weeks ended August 1, 1998 from $180.1
million for the 26 weeks ended August 2, 1997.

Loss from operations increased to $(20.4) million for the
26 weeks ended August 1, 1998 from $(19.8) million for the
13 weeks ended August 2, 1997.


FIRST UNION: Offers 31,431,000 Shares of Common Stock
-----------------------------------------------------
First union Real Estate Equity and Mortgage Investments
filed a Prospectus with the SEC 31,431,000  rights to
subscribe for and purchase  31,431,000  Common  Shares  and
(b) up to an aggregate of 31,431,000 Common Shares issuable
by First Union upon exercise of  the  Rights (including  
purchases  pursuant  to  the  Oversubscription Privilege  
and the  Standby  Commitment).  

First Union is distributing, at no cost, to each holder of
Common Shares one Right for every Common Share held.  Each
Right entitles the holder thereof to purchase one Common
Share at a subscription price of $5.00 per Common Share. To
ensure that First Union maintains  its status as a REIT,  
First  Union's by-laws restrict  beneficial and
constructive  ownership of Common Shares by any single
person or group of persons acting  collectively
to 9.8% of the  outstanding  Common Shares. Accordingly,  
absent a Waiver from First  Union, the number of Rights a
holder will be entitled to exercise may be limited.  

A full-text copy of the filing is available via the
Internet at:

http://www.sec.gov/Archives/edgar/data/0000895345-98-
000560.txt


GANTOS INC: Files Quarterly Report with SEC
-------------------------------------------
Gantos Inc. filed a quarterly report with the SEC for the
quarterly period ended August 1, 1998.

Net sales for the thirteen weeks ended August 1, 1998 were
approximately $31.8 million, a decrease of approximately
$4.0 million, compared to net sales of approximately $35.8
million in the same period of the prior fiscal year. Net
sales for stores in operation throughout both periods
decreased 11.4%, or $4.0 million, for the second quarter of
1998 compared to the same period in 1997. The 11.4%
decrease in comparable store sales is comprised of a 7.6%
decrease in unit sales (partially due to difficulties in
obtaining merchandise from vendors resulting from the
Company's current financial condition and the related
tightening of trade credit) and a 4.1% decrease in average
sales dollars per unit partially offset by a .3% increase
due to a change in merchandise mix.

Net sales for the twenty-six weeks ended August 1, 1998
were approximately $70.8 million, a decrease of
approximately $10.6 million, compared to net sales of
approximately $81.4 million in the same period of the prior
fiscal year.

The company reports a net loss of approximately $5.0
million, or $0.65 per share, for the thirteen weeks ended
August 1, 1998, compared to a net loss of approximately
$3.5 million, or $0.47 per share, in the same period of the
prior year. For the twenty-six weeks ended August 1, 1998,
the Company reported a net loss of approximately $5.7
million, or $0.75 per share, compared to net loss of
approximately $2.1 million, or $0.28 per share, in the same
period of the prior year.

The Company has entered into an Agreement and Plan of
Merger with Hit or Miss, Inc. and HOM Holding, Inc. Either
HOM Holding or the Company may terminate the Merger
Agreement if the merger is not consummated on
or before August 31, 1998, unless the failure of the
closing to occur by such date shall be due to the failure
of the party seeking to terminate the Merger Agreement to
perform or observe in any material respect the covenants
and agreements of such party.

The parties are negotiating an amendment to extend
this deadline to October 31, 1998.

The Company is negotiating with Fleet Bank and the
principal holder of the Notes issued under the Indenture
and to further defer or amend the financial covenants
under the Fleet Facility, to defer the deadline for
consummation of the merger under the Indenture and to
modify the financial covenants under the Indenture
and to further defer the July 1, 1998 Note payment
currently due September 25, 1998. If the company is not
successful in its negotiations, the continued operation of
the business is in jeopardy.


HAACK'S CYCLE AND FITNESS: Closes Stores - Files Chapter 7
----------------------------------------------------------
Haack's Cycle and Fitness has closed its three stores and
filed for bankruptcy under Chapter 7 of the federal
bankruptcy code.

Owner Terry Kardatzke, who could not be reached for
comment, listed the company's assets at $197,886 and
liabilities at $877,307. William Rameker, Kardatzke's
attorney, said Kardatzke bought the business from the Haack
family about 10 years ago.

Documents filed in U.S. Bankruptcy Court here said about 30
bikes and pieces of exercise equipment were at the stores
for repair when bankruptcy papers were filed.  (Wisconsin
State Journal -09/18/98)


HARVEY ELECTRONICS: Quarterly Report Filed With SEC
---------------------------------------------------
Harvey Electronics, Inc. filed with the SEC a quarterly
report for the period ended August 1, 1998.

The net loss for the thirty-nine weeks ended August 1, 1998
was reduced to $91,961 ($.03 per share) as compared to a
net loss of $900,168  ($.40 per share)  for the forty  
weeks  ended  August 2,  1997.  The net loss for the
thirteen weeks ended August 1, 1998 was reduced to $147,631
($.04 per share) as compared to the net loss of  $320,522  
($.14 per share) for the same period last
year.

For the thirty-nine weeks ended August 1, 1998, the
Company's net sales aggregated  $13,142,000 and increased  
approximately  $1,540,000 or 13.3% over the forty weeks
ended August 2, 1997.  For the thirteen weeks ended August
1, 1998, net sales aggregated $4,207,000 and increased
approximately $798,000 or 23.4% from the same period in
1997.

Comparable store sales increased 18% and 18.2% for the nine
and three month periods ended August 1, 1998, respectively,  
as compared to the same periods in 1997.

On  November  13,  1996,  the  Bankruptcy  Court  confirmed  
the  Company's Reorganization  Plan. The effective date of
the Reorganization Plan was December 26, 1996,  which was
within the first  quarter of the prior year.


INTERLINE RESOURCES: Creditor To Support Plan
---------------------------------------------   
Interline Resources Corp.'s Chapter 11 reorganization plan
has been approved  by the U.S. Bankruptcy Court for Utah.

The American Fork company, which licenses used-oil refining
technology, filed to reorganize in September 1997 after two
companies tried to put Interline involuntarily into a
Chapter 7 bankruptcy.

"Our plan has been confirmed and we are now moving
forward," said Interline spokeswoman Laurie Evans.

As part of its reorganization, Interline reached an
agreement with its major creditor -- an individual investor
-- to support the reorganization plan,
Evans  said.

She noted all other company creditors will be paid in full.

Interline wound up in Chapter 11 after the Quaker State-
owned Genesis Petroleum, its joint venture partner in a
used-oil refinery in Wood Cross, exercised an option
requiring Interline to buy back Genesis' 74 percent  
interest in the facility.

The two companies ended up in court and Genesis was later
one of the creditors that eventually asked that Interline
be placed involuntarily into Chapter 7.

The two companies reached a settlement in January.
Interline paid Genesis $750,000 and the Quaker State
subsidiary took over the refinery.

Quaker State sold the refinery in August to Thermo
Remediation, a subsidiary of the Massachusetts-based Thermo
Electron, said Kenny Thomas, spokesman for Quaker State's
Salt Lake City-based subsidiary Q Lube.

Evans said Interline is now working with companies that
have licensed its technology to develop two new used-oil
recovery facilities, one in Spain and the other in
Australia.

Soon after Interline found itself in bankruptcy court, the
company was removed from the American Stock Exchange. Evans
said Interline will have to wait awhile "until our
financial situation improves" before it can begin to
think about getting listed again.

Interline shares are currently listed on the OTC bulletin
board under the symbol IRCE. On Friday, the company's stock
closed at 23 cents a share.

For the second quarter ended June 30, Interline posted
revenues of $788,063 and a loss of $298,597, or 2 cents per
share. The company's shareholders equity was $1.1 million.

Interline, which also operates a trucking company and
natural gas processing and crude oil gathering system in
Wyoming, has 22 employees.(Salt Lake Tribune -09/19/98)


KOO KOO ROO: Shareholders To Vote on Merger
-------------------------------------------
Koo Koo Roo, Inc. reported in a Schedule 14A filed with the
SEC that a special meeting of stockholders of Koo Koo Roo,
Inc. will be held on October 30, 1998 at the Hyatt Regency
Irvine,17900 Jamboree Road, Irvine, California at 9:00 a.m.
local time.     
   
At the meeting, the stockholders will vote on a proposal to
approve and adopt an agreement and plan of merger pursuant
to which Koo Koo Roo, Inc. will become an indirect wholly
owned subsidiary of Family Restaurants, Inc. You are
being offered shares of common stock of Family Restaurants,
Inc., which will be renamed Koo Koo Roo Enterprises, Inc.
upon consummation of the merger.     
   
If the merger is consummated, each outstanding share of Koo
Koo Roo, Inc. common stock will be converted into the right
to receive one share of common stock of the newly named Koo
Koo Roo Enterprises, Inc. (symbol: KKRE).

The merger is described in detail via the Internet at:
http://www.sec.gov/Archives/edgar/data/0000898430-98-
003363.txt


LTCB: Government May Bail Out Bank With Public Funds
----------------------------------------------------
The government may use part of the 13 trillion yen  
of taxpayers' money set aside under the existing banking
bailout scheme for salvaging the Long-Term Credit Bank of
Japan (LTCB), Chief Cabinet Secretary Hiromu Nonaka said
Monday.

Ruling and opposition party leaders agreed Friday to
establish a new scheme to bail out banks before they are
designated insolvent, but LTCB would be
subject  to the current scheme if its financial condition
becomes critical before a new  scheme is put into effect,
Nonaka said.

"The current scheme will be effective until a new scheme is
formed. The government will need to cope with (troubled
banks) without disturbances," the top government spokesman
said.

Only days after their agreement on bills to help stabilize
the financial system, the ruling Liberal Democratic Party
(LDP) and the main opposition Democratic Party of Japan
(DPJ) are divided over the interpretation of the  
legislative steps.

DPJ leader Naoto Kan on Sunday reiterated his party's
rejection of using for the LTCB bailout the existing 13
trillion yen fund earmarked to strengthening the capital of
banks, while LDP Secretary General Yoshiro Mori suggested
on the same day that the current scheme could be applied to
LTCB.

Asked about another vague point of the LDP-opposition
agreement -- the role of the Finance Ministry -- Nonaka
said the pact can be taken to mean that an establishment of
a Financial Agency should be realized as early as possible
as part of the reorganization of government ministries and
agencies by 2003.

The opposition camp claimed that they agreed in principle
with the LDP to enact necessary legislation by June to
transform the Financial Supervisory Agency into a Financial
Agency, which is designed to take over from the Finance  
Ministry the task of regulating the financial industry and
markets, leaving only budget-related roles to the ministry.

Nonaka, however, said that financial policy-planning and
international finance-related roles would stay with the
Finance Ministry. (Kyodo-09/20/98)


LAMONTS APPAREL: Files Quarterly Report With SEC
------------------------------------------------
Lamonts Apparel, Inc. reports to the SEC that comparable
store revenues of $50.6 million for the 2nd Quarter 1998
increased $1.1 million or 2.2% from $49.5 million for the
2nd Quarter 1997. Comparable store revenues of $90.1
million for YTD 1998 increased $3.0 million or 3.4% as
compared to $87.1 million for YTD 1997.

Gross profit, as a percentage of revenues, increased 0.3%,
from 36.4% for the 2nd Quarter 1997, to 36.7% for the 2nd
Quarter 1998, due mainly to better inventory management and
controls.  Gross profit, as a percentage of revenues,
increased 0.6%, from 35.7% for YTD 1997, to 36.3% for YTD
1998. Gross profit in the first quarter of 1997 was
negatively impacted by markdowns associated with severe
winter storms.

The Company recorded net income of $0.2 million for the 2nd
Quarter 1998, compared to a net loss of $2.0 million for
the 2nd Quarter 1997.  The YTD 1998 net loss of $2.6
million decreased $4.2 million from the net loss of $6.8
million for YTD 1997.  The $4.2 million decrease is
primarily due to (i) the increase in gross profit of $1.6
million, (ii) the decrease in operating and administrative
expenses of $1.3 million, which includes the curtailment
gain of $1.0 million, and (iii) the reduction in
reorganization expenses of $1.0 million.


LOT$OFF CORPORATION: Files Quarterly Report With SEC
----------------------------------------------------
For the quarterly period ended July 31, 1998, LOT$OFF
Corporation filed a quarterly report with the SEC.

The company reports that 4,202,610 shares of the
Registrant's Common Stock were outstanding at August
31, 1998, which includes 832,697 shares held in escrow and
awaiting distribution to holders of allowed general
unsecured claims and 763,723 shares distributed to holders
of allowed general unsecured claims on September 14, 1998.

The net sales increase of 7.2% for the thirteen weeks ended
July 31, 1998 compared to the thirteen weeks ended August
1, 1997 is attributable primarily to a 6.3% increase in the
weighted average number of stores in operation (from
41.0 stores to 43.6 stores) and a 5% increase in comparable
store merchandise sales (due primarily to improved
inventory balance at the store level and the
increased resources to promote customer traffic to the
stores) and is partially offset by a decline in other
income, including income from leased shoe departments.

The company reports a net loss of $(3,259,277) for the
thirteen weeks ended July 31, 1998 and a net loss of  
$(2,239,280) for the 26 weeks ended July 31, 1998. These
losses compare to the year earlier losses of $(2,453,983)
for the thirteen weeks ended August 1, 1997 and  
$(4,817,179) for the twenty six weeks ended August 1, 1997.


LOUISIANA-PACIFIC: Announces Restructuring Plan
-----------------------------------------------
Louisiana-Pacific Corp., Portland, Ore., intends to
restructure its operations, sell seven lumber mills and
upgrade other sites, according to The Wall Street Journal.
Close to 500 workers are employed in the seven mills to be
sold (Chilico-Sandpoint, Idaho, Eatonton and Statesboro,
Ga., Hattiesburg and Philadelphia, Miss., and New Waverly
and Silsbee, Texas. Last week the company closed a plant in
Red Bluff, Calif., that employed 100 workers. (ABI 21-Sept-
98)


MOBILEMEDIA COMMUNICATIONS: Plan of Merger
------------------------------------------
MobileMedia Corporation and MobileMedia Communications,
Inc. (collectively, "MobileMedia") entered into an
agreement and plan of merger dated as of August 18, 1998
with Arch Communications Group, Inc. ("Arch") and Farm
Team Corp. for Arch to acquire MobileMedia. The agreement
and plan of merger was amended by a first amendment to
agreement and plan of merger dated as of September 3, 1998
among MobileMedia Corporation, MobileMedia Communications,
Inc., Arch Communications Group, Inc. and Farm Team Corp.

Under the terms of the agreement, Arch will acquire
MobileMedia for a combination of cash, the assumption of
certain liabilities, and the issuance of Arch common stock
and warrants to acquire Arch common stock. The merger
transaction will be implemented through the plan of
reorganization MobileMedia filed with the U.S. Bankruptcy
Court for the District of Delaware. Subject to various
closing conditions, the transaction is expected to close
during the first quarter of 1999.

A full-text copy of the agreement is available via the
Internet at:

http://www.sec.gov/Archives/edgar/data/0000950146-98-
001605.txt


MOTOROLA: Plant On Hold
-----------------------
Motorola Inc. remains committed to building a $3 billion
computer memory chip plant in Virginia but will put
construction on hold due to an "unprecedented downturn" in
the semiconductor industry. The Schaumburg, Ill.-based
company, the No. 3 maker worldwide of computer chips, on
Wednesday blamed  falling demand and an industry glut for
its decision to halt construction on the West Creek, Va.,
plant, for the second time since 1995. Motorola said it  
plans to suspend other related construction plans as well.
(Cincinnati Post; 09/17/98)


PHILIP SERVICES: Stock At 52-Week Low
-------------------------------------
Jittery investors pounded Philip Services Corp. yesterday
sending the bowed and bloodied shares to a 52-week low on
fears the firm may be heading for bankruptcy protection.

The selling came in the wake of two recent downgrades and
new indications the clock is running out on the battered
company.

Another top executive has bailed out. Graham Hoey, senior
vice-president finance, has become the latest Philip
manager to hit the exits. His departure was not announced
to markets, but an employee in his office confirmed he is
no longer with the company. She said he will not be coming
back from vacation and believes his departure is effective
the end of this month.

Philip did not return a call seeking comment. After the
stock was pummeled in early trading, it issued a statement
saying there were no developments to explain the drop and
the company is cash-flow positive.

But pressure is clearly building on the Hamilton firm as it
struggles with debts, writedowns and shareholder lawsuits.
"The equity market is saying that they're heading for the
great precipice" of bankruptcy court, said
analyst  Jordan Estra of BTAlex Brown in New York.

A filing with the U.S. Securities & Exchange Commission
shows Philip's lenders have given the company only until
Sept. 30 to sell assets and pay down part of its US$1.1-
billion debt - which is in default. The lenders can move
in  once the standstill agreement expires, although they
can choose to extend
the  deal.

Philip recently transferred the loan from long-term debt to
current liabilities, indicating the 43-member syndicate is
increasingly concerned.

The lenders are now demanding rolling 13-week cash-flow
summaries and projections every other Wednesday. And Philip
has set up a US$250,000 escrow account to guarantee
payments to its advisers.

"These guys have them on a very, very tight leash," said a
Wall Street analyst, who spoke on condition of anonymity.
"There was a rumor sweeping through {the market} that there
was a liquidity crisis. That's what caused the shares to
crater yet again."
Most of yesterday's damage was done in New York with 6.7
million shares (PHV/NYSE) changing hands, about 5.3 million
of that in block trades - suggesting institutions were
driving the action. The stock hit a new low of  
US$1 1/16 but rebounded to close at US$1 7/16, down 1/8.

In Toronto, the shares (PHV/TSE) fell to a low of $1.69 but
recaptured some ground to close down 19 cents at $2.20,
still a 52- week bottom.

"Obviously there's a wide body of opinion that says: I
don't like this thing," said Fred Ketchen, chief equities
trader at ScotiaMcLeod Inc. "Given the record of this
company, given the difficulties that they're in and perhaps  
the risks they run as a result of shareholder class action
lawsuits, bankruptcy protection may well be a factor that
has to be considered. It's a big mess."

The company issued its formal statement in mid-afternoon,
saying it has about US$75 million in available cash and
credit and was at a loss to explain the downward pressure.

"There have been no material changes to the company's
finances or operations since the issuance of the company's
second-quarter financial results. Philip is on schedule
with its asset disposition program and continues to have
the support of its lenders for its reorganization and debt
reduction program."

But the latest SEC quarterly report shows Philip is making
no guarantees about its future. "The company believes that
cash generated from operations, together with amounts
available under the credit facility, will be adequate to  
meet its capital expenditures and working capital needs,
although no assurance can be given in this regard."

Morgan Stanley Dean Witter analyst Brad Galko yesterday
dropped his coverage of the firm. Duff & Phelps Credit
Rating Co. downgraded Philip's rating in recent days, as
did Standard & Poor's Corp.

"It's questionable whether the company is worth more than
the debt outstanding - which basically makes the equity
worth zero," said a Bay Street analyst who is no longer
following Philip closely. "So the stock could be  
vulnerable to going below $1 before long - even if
bankruptcy protection is  avoided." (Financial Post
Toronto; 08/20/98)                  


PHILIPPINE AIRLINES: Will the Government Save It?
-------------------------------------------------
The Philippine government said on Sunday it was exerting
all efforts to save Philippines Airlines which has
announced it will close shop next week.

"With two days to go before Philippine Airlines closes
down, President Joseph Estrada is still trying to get the
airline's management and labour to agree to a settlement
that can keep the airline on air," the presidential  
palace said. President Joseph Estrada has offered an  
extra board seat to the unions at Philippine Airlines to
try to avert the permanent closure of Asia's first airline
in two days' time.

"The president is exhausting all efforts to arrive at a
middle ground," the palace statement added.

Asia's oldest national airline has said it will cease
operations after 57 years at midnight on Wednesday, citing
enormous losses and protracted disputes with its pilots,
attendants and ground crew unions.

PAL took the decision after its ground crew union reversed
its earlier acceptance of management's offer for employees
to own a 20 percent stake in the airline in exchange for
suspending labour bargainings for 10 years.

The union proposed a five-year suspension.

PAL's creditors and potential investors have set industrial
peace as a condition for rehabilitating the airline.
A three-week pilots' strike in June dealt PAL a heavy
financial blow, forcing it to seek a moratorium on its $2.0
billion debt.


SWALLEN'S INC: Family Agrees to Deal
------------------------------------
The family that owned Swallen's Inc., the renowned Greater
Cincinnati retail chain that folded in late 1995, has
agreed to pay creditors nearly $2 million  and give up
claims for an additional $1 million, according to
court papers.

The Swallen family agreed to the tentative deal to settle
claims that it unfairly profited from the April 1995 sale
of the firm, less than a year before the discount stores
closed.

The family will give up a portion of its $4.5 million in
proceeds from the sale, and, in return, will be released
from liability from most creditors.  Included in the
proposed deal, which still must be approved by the
bankruptcy court, is the committee representing most
unsecured creditors and attorneys for the Swallen's estate.

Not included is a group of more than 200 who bought
unsecured notes - called  debentures - from Swallen's over
the last four decades. Those claims total more  than $3.5
million and are at the bottom of the list of claims to be
paid from the estate.  The debentures paid interest rates
as high as 13 percent, and Swallen's officials touted them
to employees for years as a way to share in the company's
growth. But once the company went bankrupt, they were
essentially
worthless.

The debenture holders, most of whom are retirees from
Swallen's, are expected to challenge the proposed
settlement. Their objections scuttled a previous settlement
offer in June 1997.  The new proposal does not release the
family from claims made by the debenture holders. They
filed suit in Hamilton County Common Pleas Court in March
1996, but that action has been delayed by the bankruptcy.
Jim Cummins, an attorney for the debenture holders, said
his response to the settlement would depend on how much of
their debts his clients might recover if the Swallen family
payment goes through. (Cincinnati Post; 09/17/98)


VOXEL: A Product Worth Saving
-----------------------------
Voxel Inc.'s one product, the Voxel Imaging System, is a
box (a VoxBox), and a bigger box (a VoxCam), and a beam of  
light.

But when you see what Voxel's boxes do with that beam of
light, then it starts to make sense. You begin to
understand why so many doctors seem to care so much about
the fate of this tiny, bankrupt company.

Voxel's ability to turn light into three-dimensional
pictures of the insides of people's bodies is unique. Other
technologies, including magnetic resonance imaging and CT
scans, compress two-dimensional images to create an effect
that radiologists can read as three dimensional, but only
after years of practice.

Doctors say Voxel's ghost gives them a realistic look into
a patient's body, making it possible to practice intricate
maneuvers on light, instead of flesh and blood. Usually,
they get their first glimpse of a patient's insides when  
they begin surgery.

This technology has the potential to change surgery
according to may doctors.

It's not that big a deal on Wall Street.

Voxel's stock was delisted this month, frozen at less than
30 cents a share.  The move came less than a month after
Voxel switched its bankruptcy from  Chapter 11
reorganization, filed in May, to Chapter 7 liquidation.

The company is operating today, barely, primarily because
Tom Casey, a Costa Mesa attorney who has been appointed
trustee in Voxel's bankruptcy, has convinced a judge that
Voxel's technology might be worth more if sold off
as an  operating venture than if the company were to go
through the corporate bone picking known as forced
liquidation.

On Thursday, a Florida-based maker of security-related
holograms, Holographic Dimensions Inc., signed a tentative
deal to buy Voxel out of bankruptcy, agreeing to pay up to
$5 million later this year.  But that deal depends on the
Florida company coming up with financing, something Voxel
officials say is no sure bet.

Creditors are owed about $4.5 million. Voxel's assets
aren't known.

By 1994, Voxel had spent about $5.5 million of investor
money without generating any sales. To pay off bond debts
and repay investors, the company sold stock, raising about
$9 million by selling shares at $6. The underwriter was
stock brokerage A.R. Baron. A year later, A.R. Baron was
found to be an illegal enterprise, and some of its
executives eventually went to prison, in  part because they
illegally sold some of their stocks, including
Voxel.

Though Voxel wasn't involved in anything illegal, its
reputation might have been tarnished by its connection to
Baron _ and its inability to produce a working product out
of its medical-imaging technology. In 1995, Voxel stock  
dipped to less than $2 a share and losses mounted.

In 1996, using Irvine-based Cruttenden Roth Inc. as its
underwriter, the company raised another $9 million in a
secondary stock offering, this time at $3.50 a share. At
the time, the company still had not generated sales and had  
an accumulated loss of more than $17 million.

Voxel's stumbling block has been the one faced by many
fledgling medical companies. It hasn't been able to turn
its functional prototype (which has generated holographic
images used by dozens of physicians nationwide) into  
something that can be cranked out of a manufacturing plant.

Experts who track the medical-product industry say Voxel's
fate will depend almost entirely on whether its 3-D images
can make money, not save lives.(Orange County Register -
09/18/98)


WESTBRIDGE CAPITAL: Files Prepackaged Plan
------------------------------------------
Westbridge Capital Corp., filed a Chapter 11 petition
Wednesday in Wilmington, Del., listing total assets and
debts of about $67.3 million and $110 million respectively.  
Fort Worth, Texas-based Westbridge has filed a prepackaged
reorganization plan that was negotiated with an ad
hoc committee of holders of the company's 11% senior
subordinated notes due 2002 and 7.5% convertible
subordinated notes due 2004.  Westbridge, an insurance
holding company, expects to exit Chapter 11 by Dec. 31.


WET SEAL: Files Quarterly Report
--------------------------------
The Wet Seal Inc. filed with the SEC its quarterly report
for the period ended August 1, 1998.

Sales in the second quarter of fiscal 1998 were
$113,036,000 compared to sales in the second quarter of
fiscal 1997 of $94,254,000, an increase of $18,782,000 or
19.9%.  The dollar increase in sales was primarily due to
the net increase of 45 stores; 413 stores at the end of the
second quarter of fiscal 1998 compared to 368 stores at the
end of the second quarter of fiscal 1997. The increase was
also due to the 4.3% increase in comparable store
sales, and to a lesser extent due to sales related to the
third catalog mailing in May 1998.

Net income was $4,879,000 in the second quarter of fiscal
1998 compared to $3,417,000 in the second quarter of fiscal
1997.  As a percentage of sales, net income was 4.3% in the
second quarter of fiscal 1998 compared to 3.6% in the
second quarter of fiscal 1997.

Sales in the 26 weeks ended August 1, 1998 were
$217,881,000 compared to sales in the 26 weeks ended August
2, 1997 of $189,817,000, an increase of $28,064,000 or
14.8%. Net income was $8,367,000 in the second
quarter year to date of fiscal 1998 compared to $6,932,000
in the second quarter year to date of fiscal 1997.  As a
percentage of sales, net income was 3.8% in the second
quarter year to date of fiscal 1998 compared to 3.7%
in the second quarter year to date of fiscal 1997.


Meetings, Conferences and Seminars
----------------------------------
September 21-23, 1998
   STATES' ASSOCIATION OF BANKRUPTCY ATTORNEYS
      7th Annual States' Taxation and Bankruptcy Conference
         Hotel Santa Fe, Santa Fe, New Mexico
            Contact: 1-505-827-0728

September 23-24, 1998
   MINNESOTA STATE BAR ASSOCIATION
      1998 Bankruptcy Institute
         Regal Minneapolis Hotel, Minneapolis, Minnesota
            Contact: Minnesota CLE
            
September 25-26, 1998
   VIRGINIA CONTINUING LEGAL EDUCATION
      13th Annual Mid-Atlantic Institute on
      Bankruptcy and Reorganization Practice
         Boar's Head Inn, Charlottesville, Virginia
            Contact: 1-800-979-8253

October 8-10, 1998
   AMERICAN LAW INSTITUTE-AMERICAN BAR ASSOCIATION
      Real Estate Defaults, Workouts, and Reorganization
         Charleston, South Carolina
            Contact: 1-800-CLE-NEWS

October 9-13, 1998
   NATIONAL CONSUMER LAW CENTER
      7th Annual Consume Rights Litigation Conference
         San Diego, California
            Contact: 1-617-523-7398

October 16-20, 1998
   TURNAROUND MANAGEMENT ASSOCIATION
      1998 Annual Conference
         The Westin Hotel, Chicago, Illinois
            Contact: 1-312-857-7734

October 22-25, 1998
   NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
      72nd Annual Meeting
         Wyndham Anatole Hotel, Dallas, Texas
            Contact: 1-803-957-6225

November 9-10, 1998
   RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC.
      Conference on Corporate Restructurings: Asia
      Indonesia * Thailand * South Korea
         The Radisson Empire Hotel, New York, New York
            Contact: 1-903-592-5169 or ram@ballistic.com   

November 17-18, 1998
   AIC WORLDWIDE
      Retail Credit Card Management & Collections
         Chicago Hilton & Towers, Chicago, Illinois
            Contact: 1-212-714-1444

November 20-23, 1998
   COMMERCIAL LAW LEAGUE OF AMERICA
      78th Eastern District Meeting
         New York Marriott World Trade Center, New York
City
            Contact: Warren Pinchuck, New Hyde Park, New
York

November 30-December 1, 1998
   RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC.
      Distressed Investing '98
         The Plaza Hotel, New York, New York
            Contact: 1-903-592-5169 or ram@ballistic.com   

December 3-5, 1998
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Westin La Paloma, Tuscon, Arizona
            Contact: 1-703-739-0800

February 18-21, 1999
   COMMERICAL LAW LEAGUE OF AMERICA
      Annual Western District Meeting
         Monte Carlo Hotel & Casino Resort,
         Las Vegas, Nevada
            Contact: 1-702-382-9558

Febraury 28-March 3, 1998
   NORTON INSTITUTES ON BANKRUPTCY LAW
      Norton Bankruptcy Institute I
         Olympic Park Hotel, Park City, Utah
            Contact: 1-770-535-7722

March 18-21, 1998
   NORTON INSTUTUTES ON BANKRUPTCY LAW
      Norton Bankruptcy Litigation Institute II
         Flamingo Hilton Hotel, Las Vegas, Nevada
            Contact: 1-771-535-7722

April 26-27, 1999
   RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC.
      Bankruptcy Sales, Mergers & Acquisitions
         The Mark Hopkins, San Francisco, California
            Contact: 1-903-592-5169 or ram@ballistic.com   

April 28-30, 1999
   INTERNATIONAL FEDERATION OF INSOLVENCY PROFESSIONALS
      INSOL Bermuda '99 Conference of the Americas
         Castle Harbour Marriott Resort
            Contact: INSOL@weil.com
         
                  *********

The Meetings, Conferences and Seminars column appears in
the TCR each Tuesday.  Submissions via e-mail to
conferences@bankrupt.com are encouraged.  

Bond pricing, appearing each Friday, is supplied by DLS
Capital Partners, Dallas, Texas.

S U B S C R I P T I O N   I N F O R M A T I O N     

Troubled Company Reporter is a daily newsletter, co-
published by Bankruptcy Creditors' Service, Inc.,
Princeton, NJ, and Beard Group, Inc., Washington, DC.  
Debra Brennan and Lexy Mueller, Editors.   

Copyright 1998.  All rights reserved.  ISSN 1520-9474.  
This material is copyrighted and any commercial use, resale
or publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly
prohibited without prior written permission of the
publishers.   

Information contained herein is obtained from sources
believed to be reliable, but is not guaranteed.  The TCR
subscription rate is $575 for six months delivered via e-
mail.  Additional e-mail subscriptions for members of the
same firm for the term of the initial subscription or
balance thereof are $25 each.  For subscription
information, contact Christopher Beard at 301/951-6400.  

           * * *  End of Transmission  * * *